Croisant Corporation manufactures a product with the following standard costs :

ID: 2449041 • Letter: C

Question

Croisant Corporation manufactures a product with the following standard costs:

Direct Material (20 yards @ $1.85 per yard) $37.00

Direct Labor (4 hours @ $12.00 per hour) 48.00

Variable factory overhead (4 hours @ $5.40 p/h) 21.60

Fixed factory overhead (4 hours @ $3.60 per hour) 14.60

Total standard cost per unit of output $121.00

Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output).

July:

Direct materials purchased (16,000 yards @ $1.80 per yard) $28,800

Direct materials used (9,400 yards) -----

Direct labor (1,880 hours @ $12.20 per hour) 22,936

Actual Factory overhead 16,850

Actual production in July: 460 units

Requirements:

1.- Compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable.

a) Materials purchase price variance

b) Materials quantity variance

c) Labor rate variance

d) Labor efficiency variance

2.- Considering inter-relationships among variances; give potencial reasons for each of the variances.

Please,please please, show me your work along with your entire calculations. Thanks!

Croisant Corporation manufactures a product with the following standard costs :

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